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Will companies that play fast and loose with the Securities and Exchange Commission’s rules for disclosing executive pay begin to feel the lash of the SEC this year?

Indeed, there’s evidence that some employers may be feeling the pressure already. Proxy season is here, and this year more companies are disclosing specific performance goals that determine their top executives’ compensation. The disclosures are in line with Securities and Exchange Commission rules that took effect in late 2006.

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Sixty-eight percent of 75 large, publicly traded companies whose proxies were analyzed by Watson Wyatt made such disclosures. The human resources and compensation consulting firm looked at mostly Fortune 500 and some Fortune 1000 companies that made their 2008 filings by the first week of April.

In a similar analysis done a year ago, Watson Wyatt found that 54 percent of large companies had disclosed the performance goals, leaving a sizable number that either ignored the new SEC regulations or walked through one of a couple loopholes.

The increase in disclosure was more than Watson Wyatt had expected. In an online survey it conducted in January of this year, only 42 percent of companies said they had definite plans to adhere to the SEC’s admonishments about revealing more compensation information, while 27 percent were unsure. In effect, it seems, those that were unsure ended up playing it safe—and disclosing the performance goals.

Whether the SEC will get more aggressive about enforcing its new Compensation, Disclosure & Analysis rules is still unclear. The commission has acknowledged that it considered last year a learning-curve period. But it also said it expected companies to make the required disclosures starting this year. To show the corporate community it was serious, last October the SEC sent letters to 350 companies it deemed to have provided insufficient disclosure.

That move seems to have spurred more companies to comply. “I think this is a victory for the SEC,” said Ira Kay, global director of executive compensation for Watson Wyatt. The SEC did not return a call by press time.

Companies can free themselves of the disclosure requirements only if performance targets are not material to compensation decisions—a rare occurrence—or if they can make a convincing case that compliance would cause competitive harm. Yet many of those that are still holding out made neither claim; only 19 percent of those that did not disclose stated that competitive concerns were the reason.

Kay says that those companies are content to wait and see how far the SEC pushes the envelope. “A lot of companies told me they didn’t get one of the SEC’s letters, so they decided to do the same as last year,” he said. “I was stunned, but a lot of our senior consultants heard that. That’s the legal advice the companies were getting, which we thought was a mildly aggressive point of view.” The SEC sent the 350 letters expecting to convey the message that mandatory disclosure was applicable to everyone, Kay said.

Whether changes being made to the CD&A actually bring proxies in line with the SEC’s wishes can be somewhat subjective. Richard Smith, executive vice president and compensation practice leader at Sibson Consulting, said he too is seeing more disclosure this year. But he added that some companies “are just adding more and more text in an attempt to demonstrate transparency, and they’re doing nothing more than demonstrating confusion. They kind of shoot 100 arrows all around the bull’s eye and hit everything but exactly what the SEC wants. I saw one 64 pages long the other day.”

For his part, Smith said he doesn’t see the SEC “coming down with a hammer” on companies with errant filings. “We’ve moved the needle—just another inch—but it did move,” he said. “It’s going to be a process of the SEC keeping after companies until there’s a compromise.” The needle might move faster if the commission were to pick a model CD&A from a large, respected company and say “look, this is what we’re talking about.”

The heart of what the SEC wants is the specific metrics used to determine compensation — for example, a $1 million bonus if per-share growth is at least 10 percent. Also being requested is information on long-term compensation plans, such as those that provide cash or stock in exchange for performance thresholds being achieved over multiple years.

Only 57 percent of the proxies Watson Wyatt studied provided this information, however. And most of those used metrics relative to the performance of peer-group companies, which “doesn’t put as much of a burden on a company” as revealing metrics based strictly on its own results, according to Kay.

“The SEC wants to give shareholders the ability to determine if goals are too easy or hard and if executives are focused on the right things,” Kay said. “Without disclosure of specific financial goals, shareholders will have difficulty determining if a company follows it’s pay-for-performance philosophy.”

Some longtime corporate finance executives share those concerns. In a recent interview with CFO.com, former Chrysler and IBM finance chief Jerry York said, “I’ve seen too many cases where there seems to be a disconnect between, for example, annual bonus payouts and share-price performance. I don’t know what the answer is, but I think this would be a fruitful area to delve into more heavily.”

In another finding of the Watson Wyatt analysis, about one in 10 companies reported making changes, mostly downward ones, to the value of executives’ pension programs. While because of the study’s small sample size that amounted to only eight companies, Kay characterized it as “a huge amount” in the context of the study. Pensions formerly were regarded as almost untouchable, but pressure from shareholders was behind the changes.